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Costa Mesa, Newport Beach, Huntington Beach, South Orange County, Long Beach Area

Bed Bug Problems Are Getting So Bad That Insurance Companies Are Now Having To Offer “Bed Bug Policies”!

Since the late 1990’s, bed bug populations have multiplied at an alarming rate and they are becoming a nightmare for many owners of apartments, hotels, motels and college dorms. Insurance companies are always looking for new opportunities and several of them have now decided to start selling “bed bug polices”.

Bed bugs measure about ¼ inch long, less than 1/8th inch wide and their oval shaped body is somewhat flattened top to bottom. Adult bed bugs are a brown to reddish brown in color. They only feed on blood, prefer human blood and they like to have at least one blood meal a week. The rest of the time, they spend hiding out in the smallest of cracks and crevices, usually in or near a bed.

Bed Bugs Are By Far The Toughest Pests We Have To
Deal With And Treatment Costs Can Be Very High!

Most commercial insurance policies consider pest control services to be a maintenance expense and coverage of these services was almost always excluded. However, lawmakers began pressuring insurers to start offering coverage. Hoteliers and property owners were also seeking protection from financial losses caused by infestations. From these demands, a new market was created.

Bed bug insurance coverage is currently available from Aon Risk Solutions of Chicago, Willis North America of New York and NSM Insurance Group of Conshohocken, Pennsylvania.

“You’ve got legislators in the state of New York Assembly who are trying to make this mandatory that insurance companies do this,” said John Lafakis, senior vice president at Willis North America and program manager for the bed bug recovery insurance. “So we figured, ‘You know what, we’re going to beat everyone to the punch.’”

To eradicate bed bugs in a hotel, costs can be estimated at $600 to $800 per room. However, those cost estimates do not include the potential loss of income if an infestation becomes public knowledge. Just imagine how much business you might lose if your hotel were to be listed on a website, such as the bedbugregistry.com. Can you imagine seeing a story of your hotel in a newspaper or on a local television news program? That kind of publicity can be very damaging to any business!

The new bed bug insurance policies, offered by Willis and Aon, are sold as separate lines of coverage and have already taken off.  Annual premiums sold are ranging from $3,000 for a 100 room hotel in Oklahoma City to $150,000 for eight state colleges with 36,000 beds in New Jersey, said John Lafakis of Willis North America.

Coverage offered by Willis will include decontamination services, rehabilitating expenses, lost profit due to business interruption, crisis management (includes a 24-hour/7-day-a-week hotline), coordination with regulatory authorities, risk control and prevention programs.

“We had immediate reaction, not only from our current and prospective real estate customers, but also from our hotel and hospitality customers and have had a lot of interest from our higher-ed practice, which includes the universities and colleges, and to date, we have 15 indications out to major corporations around the country,” said Greg Gatti, the director at Aon Risk Solutions.

“Termite” Terry is not at all surprised to hear that insurance companies are getting involved. He has long been concerned about the risk of litigation over bed bug problems and he is sure that the additional protection provided by these insurers will be welcome news to many owners of commercial properties.

“Termite” Terry wants to remind everyone to really take bed bug problems seriously. If you even suspect that you have a problem with these pests, call our office at (949) 631-7348 or click on order form and schedule an inspection. Yes, bed bug treatments can be very expensive. But, if you’ll tackle these problems early, your costs can be substantially reduced. And, early detection and treatment may even cut your losses and save your reputation!